Industrial Relations (Amendment) (No. 3) Bill 2011: Second Stage

Question proposed: "That the Bill be now read a Second Time."

I am pleased to present the Industrial Relations (Amendment) (No. 3) Bill 2011 for the consideration of the House.

The main purpose of the Bill is twofold. First, it implements the commitment in the programme for Government to reform the joint labour committee, JLC, system. Second, following the High Court ruling in the John Grace Fried Chicken case of July 2011, the Government has undertaken to prepare and deliver a comprehensive reform package, as the implications of the High Court judgment are not confined to the JLC system. What is required is a programme of reforms to deliver a robust legal framework for both registered employment agreements, REAs, and JLC sectoral wage-setting mechanisms under the Industrial Relations Acts 1946 to 2004.

The system of REAs has been in force since 1946. REAs are collective agreements made between employers or their organisations and trade unions. They are freely negotiated between the parties thereto. Section 27 of the Industrial Relations Act 1946 allows the parties to a collective agreement to register their agreement with the Labour Court. If registered, the agreement is given legal effect and is binding not only on the parties to the agreement but on all workers and employers of a type or category to which the agreement is expressed to relate. It has been estimated that there were between 62,000 and 79,000 workers in the sectors covered by REAs in 2009.

JLCs are independent bodies composed of representatives of employers and workers in a particular sector, with a chairman who is appointed by the Minister. The purpose of JLCs is to discuss and agree rates of pay and conditions of employment to apply to workers in a particular sector. Prior to the 2011 High Court ruling in the John Grace Fried Chicken case, JLC proposals were given effect in employment regulation orders, EROs. The terms of an ERO were incorporated in the individual contract of employment of every worker to whom it related. JLCs have their origins in bodies empowered to set minimum wages first established in Britain and Ireland under the Trade Boards Act 1909. As part of a major reform of industrial relations in the Industrial Relations Act 1946, these bodies were given the new title of joint labour committees and their competence was expanded beyond the fixing of minimum wages to cover the regulation of conditions of employment as well. JLCs have operated in areas in which collective bargaining is not well established and wages tend to be low — for example, in the hospitality, retail grocery and contract cleaning sectors. It has been estimated that there were between 150,000 and 205,000 workers in sectors covered by JLCs in 2009.

As the House is aware, the process of making EROs has been found by the High Court to be unconstitutional. The High Court ruling underscores some of the main features of the recommendations for reform that were put forward by the independent review report on statutory wage setting mechanisms, the Duffy Walsh report, which was carried out prior to the High Court ruling. The commissioning of an independent review of the ERO and REA systems was one of the undertakings given by the last Government in the context of the EU-IMF-supported financial assistance programme for Ireland.

The High Court action in the John Grace Fried Chicken case was only one of a continuing series of legal challenges to the system of statutory wage-setting mechanisms. A challenge to the electrical contracting REA was successfully defended in the High Court in 2010 by the State but is under appeal to the Supreme Court. In addition, there are a number of pending High Court challenges to the current electrical and construction REAs, all of which challenge the constitutionality of the legislation underpinning the REA system. Since publication of the Bill in December 2011 and during its passage in the Dáil, the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, has taken the opportunity to bring forward a number of significant amendments to ensure additional constitutional safeguards for the legislation, strengthen its intent in certain aspects and provide greater legal certainty for all stakeholders affected by it. The more significant amendments have dealt with the principles and policies applying to the framing of registered employment agreements and employment regulation orders, the timeframe for the variation of registered employment agreements, provisions to protect the position of employers not party to the original sector level collective agreement, provisions governing the conduct of a review of the JLCs and provisions regarding the granting of temporary exemptions from the obligation to pay the terms prescribed under employment regulation orders and registered employment agreements. These amendments, and others, have advanced the Bill considerably in terms of setting out how the legislation will work in practice. I will outline in detail the provisions of the Bill.

The Bill is divided into three parts. Part 1 deals with general and preliminary matters such as the Short Title of the Bill. Section 1 is a standard provision in legislation providing for the Short Title, collective citation, construction and commencement provisions of the Bill. Section 2 defines the two industrial relations Acts referred to frequently in the rest of the Bill. Section 3 provides for the repeal of certain sections of the Industrial Relations Acts 1946-90 that are either anachronistic or being replaced in the Bill.

Part 2 of the Bill makes the necessary amendments to four sections in the Industrial Relations Act 1946 to provide for new procedures for registering, varying and cancelling registered employment agreements. Section 4 amends section 25 of the Act of 1946 by providing for a new definition of "registered employment agreement" so as to differentiate between those made before the commencement of the Bill — those registered by the Labour Court — and those made after its commencement — those confirmed by ministerial order.

Section 5 sets out more detailed principles and policies than under the 1946 Act. These are the principles and policies to which the Labour Court must have regard before registering an employment agreement. The 2011 High Court judgment confirmed that the Oireachtas may devolve certain law-making powers to other bodies such as Ministers, the Government or the Labour Court. However, it also made it clear that where the Oireachtas devolved a law-making power to some other body, it must give that body guidance on how the law-making power was to be used. That guidance should be set out in primary legislation by way of clear principles and policies.

A key element of the reforms provided for in the Bill is the introduction of provisions to ensure comprehensive Oireachtas and ministerial oversight of the REA and JLC systems. Accordingly, new registered employment agreeements will not come into force until they have been confirmed by the Minister. Sections 6 and 7 make necessary changes to the 1946 Act to ensure variations or cancellations of new or existing registered employment agreements must also be confirmed by the Minister before such variations or cancellations will have effect. Henceforth, the confirmation, variation or cancellation of an registered employment agreement may be annulled by either House of the Oireachtas within a specified period.

The 1946 Act does not provide a satisfactory definition of the phrase "substantially representative", nor does it provide any guidance on how it is to be measured. The Labour Court has drawn attention to the limitations of the original statutory definition. This issue was carefully considered in the Duffy-Walsh report. In this context, the Government accepted the recommendations made in the report for changes to be made to the provisions of section 27 of the Act of 1946 to provide that, in the case of trade unions, the degree to which trade unions were representative of workers to whom an agreement related should be measured by reference to the unions' membership in the employment or sector concerned and, in the case of employers or employer organisations, the extent to which they could be regarded as representative should be weighted by size, measured by the number of employees normally employed.

Accordingly, section 27 of the 1946 Act is being amended by section 5 of this Bill to provide guidance to the Labour Court on how the question of representativeness should be determined. Moreover, amendments introduced on Committee Stage in the Dáil have provided for a more explicit ordering of the priority ranking of the principles and policies to be taken into account by the Labour Court in considering an application for the registration of an employment agreement. Particular considerations that have been identified in this regard are the representativeness of the parties and the "common good" or public interest objectives of establishing harmonious industrial relations between workers and employers and the avoidance of industrial unrest.

Section 5 also amends the 1946 Act to provide that every application to register an employment agreement must be accompanied by confirmation provided by the parties to the agreement that they are substantially representative of the employers and workers to whom the agreement applies. A consequential provision at section 7 amends the 1946 Act so that the Labour Court may cancel an REA if either the worker or employer parties have ceased to be substantially representative of the workers or employers concerned.

Section 6 amends the 1946 Act to reflect the recommendation of the Duffy-Walsh report concerning the introduction of a time-bound process by which the terms of an REA may be varied by the Labour Court in exceptional circumstances without obtaining the consent of all parties to the agreement. The amendment is intended to facilitate more rapid adjustment to changing economic circumstances and the imperative of maintaining employment. Amendments were introduced to section 6 on Committee Stage to speed up the variation of REAs by setting specified time limits to each stage of the process, as agreed with the EU-IMF-ECB troika in the context of the memorandum of understanding.

Under the Industrial Relations Acts there is a legal requirement that employers within the sector covered by an REA, who may not belong to the employers' organisations that signed the original collective agreement, must nonetheless apply the minimum standards prescribed by the REA. In light of recent legal challenges to the statutory wage-fixing mechanisms, the Attorney General has advised that, in order to maintain their universal applicability, additional safeguards to those included in the published Bill should be introduced to protect the position of employers who were not party to the original sector-level collective agreement by enabling such parties to seek a variation of an REA in certain limited circumstances. Accordingly, a further amendment to section 6 of the Bill was introduced on Committee Stage to enable those who were not party to the original agreement to seek a variation of an REA in certain limited circumstances.

The new section 28(10), inserted by section 6 of the Bill, provides that an employer who is affected by an REA but who was not a party to the agreement may apply to the Labour Court to vary the agreement in certain circumstances. The applicant will have to satisfy the court that there has been a substantial adverse change in the economic circumstances of the sector to which an REA relates since it was registered or last varied before the court can consider any application to vary it. As a further protective measure, no such request may be made within 12 months of the initial registration or last variation of the REA or of the date on which a previous application for variation was refused.

Section 7 makes the necessary changes to the 1946 Act to enable the Labour Court to conduct a review of the circumstances of an industry to which an REA applies to establish whether there has been a substantial change in the circumstances of the relevant industry and whether the continued registration of a particular REA is desirable. Section 8 amends the Act of 1946 to provide a new straightforward enforcement mechanism to secure compliance with REAs instead of resorting to a criminal prosecution. A complaint about non-compliance by an employer with an order of the Labour Court for compliance with a registered employment agreement may be brought before the Circuit Court by or on behalf of the worker concerned or the Minister if he or she considers it appropriate to do so. The Circuit Court shall make an order directing the employer to comply with the terms of the Labour Court order.

Section 9 amends the 1946 Act introducing new inability to pay provisions in respect of registered employment agreements. These provisions are substantially the same as those proposed in regard to employment regulation orders which I will outline when we come to deal with such orders. However, for registered employment agreements, the inability to pay mechanism would only apply where the registered employment agreement permitted it to apply. Accordingly, where an registered employment agreement so provides, an employer in financial difficulty may apply to the Labour Court seeking a temporary exemption from the requirement to pay the rates of remuneration in the agreement.

Part 3 of the Bill deals with the joint labour committee system and the making of employment regulation orders. Section 10 provides for a new definition of "employment regulation order" to relate exclusively to those orders made after the commencement of this Part of the Bill when enacted, that is, by ministerial order.

The Duffy-Walsh report had recommended that reviews of the establishment orders of existing JLCs be undertaken periodically to ensure the range of establishments to which they applied remained appropriate and that any necessary amendment might be made to the establishment orders by which they were created. Accordingly, section 11 amends the Act of 1946 to provide that the Labour Court will, following commencement of the Bill and at regular five year intervals thereafter, conduct such reviews. Following a review, the Labour Court may recommend that a JLC be abolished, amalgamated with another JLC or that the establishment order for a JLC be amended. An amendment to the Bill, as published, provides that the procedures for the conduct of a review of the establishment order for an existing JLC should be analogous to the public inquiry procedure for an application for a new establishment order setting up a JLC as provided under section 38 of 1946 Act.

Section 12 inserts new provisions in the Act of 1946 to provide for the regulation of the decision making procedures with regard to the formulation of proposals for employment regulation orders by a JLC, the reception of representations by a JLC and also a requirement that the committee's chairman shall have regard to a relevant Labour Court recommendation in the event of a casting vote being exercised. The High Court, in the John Grace Fried Chicken case, declared section 42 of the 1946 Act to be unconstitutional because it was invalid having regard to the provisions of Article 15.2.1o of the Constitution which provides that the sole and exclusive power of making laws for the State vests in the Oireachtas. In this context, the High Court judgment found that section 42 of the Act of 1946 failed to prescribe sufficient principles and policies to govern the exercise of the powers conferred on JLCs under the Act. Accordingly, section 12 introduces the necessary amendments to the Act of 1946 to establish the principles and policies to which a JLC must have regard from now on when formulating proposals for employment regulation orders. The new provisions will guide the formulation by JLCs of proposals on the fixing of remuneration and conditions of employment and also provide for the regulation of the JLCs’ own decision-making process.

As with registered employment agreements, REAs, amendments to the published Bill provide for a more explicit ordering of the priority ranking of the principles and policies to be taken into account by a JLC in considering proposals for the making or variation of an ERO in addition to more explicit ordering of the priority ranking of the principles and policies to be taken into account by the Labour Court in making a recommendation to a deadlocked JLC. In this context, the public interest objectives of establishing harmonious industrial relations between workers and employers and the avoidance of industrial unrest are the key considerations. The constitutionality of the restored JLC system should be strengthened as the Bill not only provides for a direct role by the Minister in making employment regulation orders in future, but also ensures that, with regard to all such orders, including orders for the establishment, variation or abolition of JLCs, the Minister may refuse to make any order that he or she considers inappropriate. If the Minister is not satisfied that it is appropriate to make an order he or she may refuse to do so and notify the Labour Court of the reasons for the decision. These measures are also complemented by the standard scrutiny procedure for the laying of orders before both Houses of the Oireachtas.

Whereas previously an employment regulation order could provide for any number of different rates of pay for different categories of workers, the Bill provides that a JLC may make proposals for a basic rate and will have discretion to take account of recognised standards or skills in the relevant sector as well as length of service in fixing up to two higher hourly rates under employment regulation orders.

Are the Senators still with me?

Can the Minister of State start again?

The adult wage rates that may be proposed by a JLC will also be linked to sub-minimum rates that will apply in the same proportions as were originally fixed under the National Minimum Wage Act 2000 in respect of employees aged under 18 years, first-time job entrants, and employees undergoing training.

JLCs will no longer set certain conditions of employment that are already provided for in existing primary legislation. In particular, provision for a Sunday premium will be removed from the scope of employment regulation orders. However, it is important to bear in mind that the special position of Sunday working is still recognised and provided for under the Organisation of Working Time Act. During the debate on Committee Stage in the Dáil on the issue of the Sunday premiums, there were some suggestions that these new provisions would mean a downward revision of pay or the removal of such premiums where these have been paid to workers previously covered by employment regulation orders. This is not the case. Under the new legislation, workers in sectors covered by JLCs will have the same statutory entitlement to compensation for Sunday working as all other workers in the country.

Section 13 inserts a number of amendments to replace provisions struck down by the High Court judgment in the John Grace Fried Chicken case. The High Court judgment highlighted how questions about the appropriateness of criminal sanctions exacerbated concerns about the delegation of broad regulatory powers to bodies such as JLCs and the Labour Court. The Bill introduces an alternative enforcement mechanism to criminal prosecutions. The new enforcement mechanism will offer an alternative to a criminal prosecution by enabling a complaint about non-enforcement to be brought before the Labour Court.

Section 13 introduces a new procedure to enable an employee or an employee's trade union to make a complaint to a rights commissioner that an employer has contravened an employment regulation order in relation to the worker. The Minister does not consider that this alternative to the original enforcement provision in section 45, which was struck down by the High Court, should be the only enforcement mechanism to ensure that wages are not paid at less than the statutory minimum rates set out in employment regulation orders.

The Minister intends, by means of the proposed workplace relations reform programme, to develop a new and comprehensive system of supervision and sanctions within the framework of the workplace relations commission. It will bring together the existing services of the Labour Relations Commission, the Rights Commissioner Service, the Equality Tribunal, the National Employment Rights Authority and the first-instance functions of the Employment Appeals Tribunal.

As Senators will be aware, last week the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, announced his proposals for the workplace relations reform programme. One of the features of the programme is to ensure a more proportionate, efficient and effective enforcement of all employment law, including the national minimum wage, registered employment agreements and employment regulation orders. The Minister will present his proposals to the Oireachtas Joint Committee on Jobs, Social Protection and Education this week. He intends to seek approval for drafting the workplace relations (reform) Bill, which will give statutory effect to the reforms, including strengthening the enforcement of awards. He intends to make provision in the Bill for a range of enhanced compliance measures, including the use of compliance notices, fixed charge notices and a new mechanism for enforcing awards of the workplace relations commission adjudicators and Labour Court determinations. I am sure Senators will agree on the importance of ensuring there is a consistent approach to enforcement mechanisms across the range of employment rights legislation.

Section 14 provides for a derogation from the scope of employment regulation orders, EROs, for companies in cases of financial difficulty. As I have mentioned, these provisions mirror the mechanisms for claiming an exemption from the requirement to pay the rates of remuneration in a registered employment agreement, REA, at section 9. The basis for claiming an exemption on grounds of inability to pay is less restrictive than the equivalent measure under the National Minimum Wage Act 2000, which has never been used to date. The objective of the provision in the Act of 2000 was that the relief sought by an employer would be available in cases in which a majority of employees so agree. The new provision covers situations in which a majority of employees may not necessarily agree but it can be proved to the satisfaction of the Labour Court that there is a genuine — albeit temporary — inability to pay and that appropriate safeguards can be assured. The maximum period of an exemption will be 24 months, with a minimum of three months. An amendment to the Bill as presented provides that two consecutive exemptions will be permitted within the overall two-year time limit rather than a single one under the Bill as introduced, where this is necessary to safeguard employment. An amendment to the Bill as presented provides that an employer's application for an exemption on grounds of inability to pay should not rest solely on the declared support of the majority of workers. The key criterion should hinge upon the survival of the employer and the preservation of the jobs of the individuals concerned. The Labour Court must also have regard to whether granting an exemption might have an adverse effect on employment levels and cause a distortion of competition in the sector to the detriment of employers not party to the particular application.

Section 15 provides that, in the context of the reconstitution of existing JLCs, all current independent members of the JLCs will cease to hold office and new appointments will be made. In future, independent members will hold office for a period not exceeding five years. Section 16 provides for consequential amendments to the Employment Permits Act 2006 and the Organisation of Working Time Act 1997.

Section 17 amends the Protection of Employees (Employers' Insolvency) Act 1984. It will ensure that payments due to a worker arising from a decision of a rights commissioner or a determination of the Labour Court made under the Bill, when enacted, will be treated as debts for the purposes of employees' rights on the insolvency of their employer.

Section 18 strengthens the provisions for informing workers of their statutory entitlements by requiring the employer of any worker to whom an ERO or REA applies to include the terms of that ERO or REA in the written statement of terms of employment to be given to the worker under section 3 of the Terms of Employment (Information) Act 1994. This section also provides for prompt rectification of incomplete or incorrectly stated terms by allowing a NERA inspector to give directions to the employer concerned. The new approach will enable matters to be rectified earlier at workplace level, thereby avoiding unnecessary recourse to rights commissioners and on appeal to the Employment Appeals Tribunal.

To complement the provisions of the amending legislation, the Minister will proceed with the following additional reforms. Steps will be taken to reduce significantly the number of JLCs in place through a process of abolition or amalgamation using the Minister's powers under section 40 of the Industrial Relations Act 1946. Benefits in the nature of pay, including overtime and the conditions under which it becomes payable, will be standardised across sectors covered by JLCs, either by means of a nationally agreed social partnership protocol, a statutory code of practice or through a request to be made to the Labour Relations Commission to initiate social partner consultations to this end. The Minister will arrange for the preparation of a new statutory code of practice on Sunday working to provide guidance to employers, employees and their representatives in sectors covered by employment regulation orders on arrangements that may be put in place to comply with the options specified at section 14 of the Organisation of Working Time Act, 1997. The rights commissioner or Labour Court will have regard to this code in making a decision, and implementation and enforcement will be as per the Organisation of Working Time Act 1997. The Minister intends to request the Labour Relations Commission to prepare the code. The code of practice will subsequently be given formal status by means of a ministerial order.

The legislation represents an appropriately balanced approach. The reform of the statutory wage setting machinery operating at sector level and placing the JLC and REA systems on a more secure legal and constitutional footing represents a significant commitment by the Government to protect the lowest paid and most vulnerable workers. The overall effect of these reforms will be to help reduce the cost burden of record keeping and compliance and will make the long-established minimum wage setting mechanisms fairer and more responsive to changing economic circumstances. These measures, in turn will enhance competitiveness and preserve jobs in the affected sectors.

I commend the Bill to the House.

I thank the Minister of State for a thorough explanation of the Bill. Much work certainly has been done by the Department's officials.

I am pleased to have the opportunity to speak on the Bill. Under previous Governments it is likely a Minister of State with responsibility for labour affairs would have steered the Bill through the House. However, such a distinctive and necessary portfolio no longer exists since March 2011, just as the Department of Labour ceased to exist in 1993. Both events occurred at a time when the Labour Party was entering government after a period in opposition. Is this connected or is it a coincidence? It appears the cause of labour has lost out at ministerial level. It is fair to say it also lost out in the Bill.

Before dealing with the substance of the Bill, I register my great dissatisfaction at the speed with which it is going through the House. There is only one full sitting day between Second and Committee Stages in the House. In the other House there was five months between Second and Committee Stages, the Bill being introduced in January and Committee Stage taking place in June. While I do not want the Bill bogged down in this House for five months, more time would have been in order. On Committee Stage the Minister said the Bill would be brought to the Seanad on 18 July. Furthermore, the sponsoring Department, the Department of Jobs, Enterprise and Innovation, is introducing a Bill on Thursday. The Government needs to schedule the taking of legislation more efficiently. The issue of JLCs and registered employment agreements has generated much controversy and debate in the past two years, including between the partners in government. There was a remarkable campaign against the Minister for Jobs, Enterprise and Innovation by Labour Party Members which was so sustained that it must have been organised rather than spontaneous. It was clear that the Minister's partners in government had no difficulty with there being an unprecedented campaign against him.

It is more than one year since the High Court made its judgment and rendered unconstitutional laws that had stood for 60 years. In the immediate aftermath of the decision Fianna Fáil published legislation to correct the situation. It would have provided for the amendment of the Industrial Relations Acts of 1946 and 1990 in order that the statutory mechanism for the fixing of remuneration by an employment regulation order would be consistent with the requirements of the Constitution. The Fianna Fáil proposals would also have decriminalised a failure on the part of an employer to comply with an employment regulation order, as recommended in the Duffy-Walsh report, and replaced the provision with a civil enforcement mechanism. If the Fianna Fáil Bill had been enacted, it would have enabled the Minister for Jobs, Enterprise and Innovation to make new employment regulation orders for all such workers under a new statutory mechanism that would take into account and rectify the failings of the 1946 and 1990 Acts.

The Fianna Fáil Party accepts the need for a Bill to deal with the High Court ruling last year that the JLC system was unconstitutional. However, the legislation introduced by the Government is seriously deficient and could undermine JLCs and employment regulation orders and leave workers in a vulnerable position. The concerns we expressed have not been addressed and there has been a failure on the part of the Government to maximise protection for workers.

We are having this debate at a time when the unemployment rate is 14.9%, the highest since the economic crisis began. Almost 20,000 more people signed on the live register in June alone. What is deeply worrying is that the number long-term unemployed continues to rise. There has been a 7% increase in the number of such claimants in the past 12 months. The latest quarterly household survey figures show that the long-term unemployed account for 60% of the total and the level of youth unemployment stands at 30%. I speak about tackling the scourge of unemployment, having started a business in 1986 for the sole purpose of creating employment. I experienced the recession in the 1980s and the ravages of unemployment and know what it does to human beings. In the article entitled, Lunch with the FT: Jean-Claude Trichet, in Saturday's edition of theFinancial Times, Jean-Claude Trichet considered the question of how the European would get its economy straightened out and said it was all about competitiveness. I concur. We need a discussion about competitiveness and the people.

That is what the discussion is about.

The JLCs were established by Mr. Seán Lemass in 1946. His intention was to protect people who did not have access to the traditional system of collective bargaining based on trade union representation. JLCs are independent bodies for determining minimum rates of pay and conditions of work for workers in certain sectors. Each JLC includes a representative of workers or employees in the sector concerned. It was far reaching and progressive legislation for its time. The pay and conditions agreed to by representatives on JLCs were given the force of law in employment regulation orders and employers were liable to be prosecuted in the civil courts for further breaches of the orders. This provision was found to be unconstitutional by the High Court last year. CSO figures indicate that the average earnings of workers in the JLC structure are approximately €300 per week. The JLC system applies to those employed in the catering and hotel industries.

Tomorrow at the Joint Committee on Jobs, Enterprise and Innovation the Minister for Jobs, Enterprise and Innovation will announce his proposals on the workplace relations reform programme. The Minister of State, Deputy Sean Sherlock, said:

One of the features of the programme is to ensure a more proportionate, efficient and effective enforcement of all employment law, including the national minimum wage, registered employment agreements and employment regulation orders. The Minister will present his proposals to the Oireachtas Joint Committee on Jobs, Enterprise and Innovation this week. He intends to seek approval for drafting the workplace relations (reform) Bill, which will give statutory effect to the reforms, including strengthening the enforcement of awards.

In the 1970s I was a member of the national women's committee of the Federation Workers Union of Ireland and started a business with the sole purpose of creating employment. There is a very serious issue in this sector. As we said, there are vulnerable workers. Many of those employed in the catering and hotel industries are the so-called "new Irish" and they need to be supported and given a voice. There is a fear that these workers do not have the confidence to speak up for themselves.

There has been an over-reaction on the issue of Sunday trading, as I said to Senator Deirdre Clune. It is a fact that hotels and restaurants are open on a Sunday. I agree that there should be some form of compensation for working on a Sunday, perhaps time off in lieu, but premium payments went overboard in recent years.

The reforms in the Industrial Relations (Amendment) (No. 3) Bill which I welcome are far reaching. The complete overhaul of the JLC and registered employment agreement structure is appropriate at a time of economic difficulties. If the Bill had been introduced ten years ago, it would not have received the same reception. We must ensure we are competitive, that employers can survive and that employers and employees can thrash out the issues involved and move forward. That was the idea behind the JLCs originally. Senator Mary White referred to Mr. Seán Lemass. I had not realised that the committees had dated from his time.

Senator Mary White also mentioned that Deputy Willie O'Dea had brought forward a Bill in the name of Fianna Fáil following the High Court's recommendations of July 2011 which I think was a rehash of the lapsed Industrial Relations (Amendment) Bill 2009 that had been introduced in the 30th Dail by the then Minister of State, Deputy Dara Calleary, under the direction of the then Minister for Enterprise, Trade and Employment, former Deputy Mary Coughlan, but had not reached Committee Stage. That Bill introduced just one of the 19 recommendations made in the Duffy-Walsh report. The Bill introduced by Deputy Willie O'Dea also failed to reflect the High Court's recommendations.

The Duffy-Walsh report recommended a complete overhaul of the system and the Bill before the House implements its recommendations.

We have heard a good deal about it in recent years, especially in the hospitality sector, to which Senator Mary White alluded. There was a ludicrous situation where in some cases employers were obliged to pay three times the rate to those working in the hospitality sector outside Dublin. As a result one could not have a meal in Cork city on a given Saturday and restaurants and bars in hotels and stand-alone restaurants simply did not open because they could not afford to do so. This legislation will rectify this ludicrous situation and allow it to be changed. The High Court recommendation of last year in the case of John Grace Fried Chicken Limited challenged the catering sector, especially outside Dublin. The High Court stated the catering arrangement was unlawful and represented a disproportionate interference with the property rights of the plaintiff. It also stated the joint labour committees, JLCs, gave powers to the Labour Court with no policy guidelines. As a result of that judgment, the National Employment Rights Authority, NERA, was no longer investigating or implementing the provisions of registered employment agreements or JLCs. As a result of the High Court case, too many employees were left in a vulnerable position. We are introducing this legislation to ensure this situation can be rectified and in order that employers will be given protection and an opportunity to negotiate rates and conditions of pay and develop an agreement that can then be registered with the Labour Relations Commission or the Labour Court.

There have been issues with registered employment agreements. There was an outrageous situation where electricians and electrical contractors could not afford to take on jobs because they had to pay electricians between €15 and €18 per hour in some cases.

The Senator is right.

The individuals in question were willing to work for a lower rate, but because of the agreement they were precluded from doing so. I hope some sense and balance will be brought to the issue with a recognition that there are two sides to the story. The Labour Court can now take into consideration the economic environment in which the employment is based. It can recognise the particular enterprise and regulate competition in a given sector and how it is affected. The example that comes to mind immediately is the construction sector, but it may also apply to the hospitality and catering sectors which may be competing with the sectors in other jurisdictions. All of these items can now be taken into consideration to ensure a fair and balanced approach is taken.

As the Minister of State noted, the issue of Sunday pay is addressed under the Organisation Of Working Time Act. This is a pragmatic approach. A code of practice should be developed to which all sides could contribute. Anyone employed in the catering and hospitality sectors will recognise that Sunday is the same as Monday. However, if one was employed as a private secretary in a solicitor's office, generally speaking, one would work from Monday to Friday. If such a person was asked to work on Sunday or do overtime, it would be a different matter. We should let this come into play and let the code of practice reflect such scenarios. There are regional variations. There are historical reasons for all these arrangements, but the reasons are not very evident in today's climate. Some regional variations cannot be provided for, but there should be uniformity throughout the country.

I welcome certain provisions and the fact that the Bill will provide clarity for the Labour Court in certain areas. It will recognise changes in certain industries and types of enterprise, which is most important. The amendments introduced on Committee Stage in the Dáil are welcome especially for registered employment agreements. The Minister of State has covered this area. Civil penalties, as opposed to criminal proceedings, will be part of the Bill, which is a significant consideration given the High Court judgment. The rights commissioner will also come into play. Perhaps the Minister of State might expand on this point. What is the timescale involved and how does he envisage this operating?

I welcome the Bill. It is refreshing, reflects the economic climate of today and gives balance for employees and employers. It allows for a situation where if an employer is in difficulty, it is not a simple case of there being no room for consultation. There are provisions whereby in difficult economic circumstances where an industry is experiencing particular difficulties, all of this can be taken into consideration.

I welcome the Minister of State. There are several aspects to this legislation. When the industrial relations machinery was overturned in the High Court and sections 42, 43 and 45 of the Industrial Relations Act 1946 and section 48 of the 1990 Act were all found to violate Article 15.2 of the Constitution, we should have accepted it. The economy was far better off afterwards. Most of what is included in the Bill is unnecessary. We still have minimum wage legislation and I support the Government's defence of it against the IMF. As IBEC pointed out, there are still 40 tranches of legislation designed to protect employment. What are we at? The real winners were those in the industrial relations industry which comprises an immense number of gurus, committees and so on. The Minister of State referred to JLCs, registered employment agreements, rights commissioners, the LRC, the social partnership protocol, codes of practice, the Labour Court, the workplace relations reform programme and a public inquiry procedure. We are running around on mountains of jargon and paper. In one case not referred to by the Minister of State Ryanair defeated the whole lot in the Supreme Court. Are we protecting the egos of those involved in the industrial relations sector, with its incredibly complex procedure and use of jargon, or are we considering how the economy works? If it is about how the economy works, I support the Government which defended the minimum wage legislation. There is also other legislation to protect workers adequately.

I am not aware that the sky has fallen down in the years since the decision was made. That was one fear expressed, but the economy has continued to work. The real economy has been at its most valiant, trying to protect jobs against the recession in the economy. The objective in industrial relations should be to deal with the unemployment rate of 14.9%. Those of us in employment should take second place for the moment. The excesses of social partnership, undoubtedly, did serious damage to the country, especially in employments such as the ESB and so on, and this should be recognised. I recall the Taoiseach speaking at the ICTU conference when he distanced himself from social partnership because it had become excessive. It was part of the reason the whole place had imploded.

Let us consider what people who provide work say. The Construction Industry Federation has expressed its disappointment. The Irish Hotels Federation has stated the JLCs provide an outdated and regressive employment framework. The Restaurants Association of Ireland has stated it was outraged. It took a case which it won. It seems that much of the legislation represents our trying to unpick a decision against those who work. This reduces investor confidence in the country and undermines the status of the courts as the institutions to adjudicate on these matters. If one entity wins a case in court, we change the law and get it some other way. Even the most mild of the employers' organisations, IBEC, has stated we should avail of the opportunity to walk away because there is plenty of protection for employer rights. We should have shrunk the IR sector and relied on those basic provisions which IBEC set. IBEC is not the most radical of the business organisations — ISME is — and does not much like what we are doing either.

Looking through the provisions, I mentioned all the quangos and committees referred to in the Minister of State's speech. He stated: "It has been estimated that there were between 62,000 and 79,000 workers in the sectors covered by REAs in 2009." There is a difference of 28%. Is the Department so imprecise that it does not know what the Bill is supposed to protect? He later stated that the JLCs cover between 150,000 and 205,000 workers. There is a 36% difference between those two numbers. Why does the Department not know? Is this Bill not merely the IR sector trying to expand in an economy where the emphasis should be on employment creation and where the protection against exploitation, on which we all will support the Minister of State, is through the minimum wage laws and the established employment laws?

It seems that what we have is an unsatisfactory compromise between the two parties in Government. They have produced a mishmash. Had the Government gone for straightforward employment growth, as Senator Clune stated, Sundays and Saturdays would be working days. We all are plugged into the international system and one should do away with all of the quangos. In parts of the Minister of State's speech, the quangos become more powerful. One can be compelled to be part of them rather than go the Ryanair route and state one does not want to be part of them. If a person is paying good wages and has working conditions which might not satisfy the IR sector but satisfy those working in them, that is good news as far as I would be concerned, particularly in the difficulties in which we find ourselves.

I shall take a look through other parts of the Minister of State's speech for when we go on to further Stages. Unusually, in my view, IBEC got it right in this regard, and so did the organisations which have come out even stronger against the Bill. There was a decision made in a court of law. We had other protections for workers. Apart from a face-saving measure on behalf of the industrial relations sector, which has been far too strong and big in this country, this is an unnecessary overhead being imposed on the shoulders of the sectors on which we rely for the goal we all share to reduce unemployment in this country.

I welcome the Minister of State, Deputy Sherlock, to the House. I listened to his speech which was detailed and fairly jaw-dropping. It explains everything well.

The last three paragraphs of his speech encompasses the Bill. He stated? "The reform of the statutory wage setting machinery operating at sector level and placing the JLC and REA systems on a more secure legal and constitutional footing represents a significant commitment by the Government to protect the lowest paid and most vulnerable workers." Industrial relations has moved on in the past 20 years with the advent of foreign nationals who have come here to work, generally at the lower end of the employment scale. Those workers must be protected, as must citizens who work Saturdays and Sundays.

Perhaps the debate on Saturday and Sunday working is one we should hold separately. I have been to France on occasion. One year, on a Sunday, I went looking for a litre of milk in a town on the south coast of France and it was not available. All the shops and filling stations were closed. We were looking for milk only with which to feed the baby, but it ended up that we had to go into a bar to ask for a litre of milk. For the French, not because of any religious reason or any other reason, Sunday is the day where they do not work generally.

The catering and hospitality sectors here are the sectors which are under pressure on Saturdays and Sundays. In the retail sector, people shop on Saturdays and maybe even Sundays at times because the shops are open, whereas as far as the hospitality and the catering sectors are concerned, people are on their leisure time and go for a meal and a drink at the weekend. It is necessary that the hospitality and catering sectors are focused on this but it is not in the case of retail. One can only shop so many days in the week but one eats every day of the week. The weekends are important for the tourism sector.

We have a system where Sunday wages will match what workers expect. Any Member of the House who, as part of public life, must spend a Sunday at a function knows it is time out of one's leisure. It is time one's family misses one and one misses one's family. Many are forced into working on Sundays out of economic necessity or because an employer states that if the person does not work a Sunday, he or she will remember that. It is a broader debate for another day. I read a book some years ago calledNo More Sundays in Belgium, which described how, before the First World War, the Sunday was the Belgian day on which one drank coffee, but that when the war started, Sunday disappeared into Monday, Tuesday, Wednesday, etc. The European model of a Sunday, where we go back to a more basic day of shopping and leisure, has been raised again in these economic times.

The Bill is important for someone like me who set up their own business. Unlike Senator White, I set it up not to provide employment for others but to provide employment for myself and my family. That is how small businesses function. One does not set up a business to provide employment for others. Perhaps Chuck Feeney could do it because he had $10 billion in the bank. All small businesses are set up to give the person an income. It is fair enough if one gets to a stage where one has so much money one can set up businesses for philanthropic purposes.

I understand the sensitivities of dealing with staff. Asking staff to work days on which they are not generally expected to work is quite difficult and is something every small business must deal with differently. There are different sectors, such as retail, hospitality and financial services. The issue of trading on a Sunday does not arise for a solicitor or an insurance office. Employers in the hospitality sector have a difficulty. In the Minister of State's view, to get the unemployed back to work, to achieve competitiveness in the economy and for the economy to grow again, we must deal with setting wages that will be competitive for the employer but also will look after the vulnerable workers who must work on a Saturday night or Sunday morning.

The Minister of State said the overall effect of these reforms will be to help reduce the cost burden of record-keeping, which I am aware has got out of hand for small businesses. I refer to the cost of compliance, form-filling and keeping records. It is not that proprietors do not want to keep records; it is the duplication of records that is the issue. When I started my insurance business in the early 1980s, everything was photocopied and kept manually. With the advent of technology, we were told we would have less paperwork. Anyone in business will be aware their paperwork has trebled or quadrupled in that time because the compliance offices state one must keep a paper record of every e-mail one sends and every application made. It has ended up that technology has generated more paperwork than existed previously. Record-keeping and compliance is still a problem for small companies. It is an extra cost they sometimes cannot bear.

I welcome and commend the Bill. As someone in small business who talks to those in small businesses all the time, it is welcome legislation that must enhance competitiveness, preserve jobs and create more.

I welcome the Minister of State. In considering this legislation Senators would do well to examine the reasons the joint labour committee system was introduced in the 1940s. Employment regulation orders and registered employment agreements remain necessary as they play a vital role in protecting the most basic and essential rights of workers in the regulated sectors, including basic wage levels and conditions relating to overtime, anti-social hours and sick pay entitlements. The purpose of the JLCs is to provide legal protection for workers in sectors which are prone to exploitation. Workers in the hospitality and retail trades, for example, tend to be non-unionised and low-paid and are frequently part-time, female or migrant workers. Without the JLC system, unscrupulous employers could, in the current climate, reduce pay to the bare minimum legal limits. For the benefit of the House and in case anyone is labouring under any delusions that workers who come within the terms of EROs and REAs are on the pig's back, under the previous dispensation the top rate of pay for workers covered by the retail JLC was €9.66 per hour. An employee working a 35-hour week on this rate would have an annual income of €17,500.

I note that the European Union labour costs survey for 2008 shows that Irish labour costs in the retail sector and in hotels and restaurants were below the European Union average, while the operating costs to labour costs ratio was on a par with the EU average. According to a National Employment Rights Agency report from last year, more than 7% of employers in the largest three sectors covered by JLC agreements were in breach of their obligations. It found that 53% of workers in these areas were earning less than the minimum wage, 51% were not in receipt of wage slips, 83% did not receive a contract or terms of employment, 85% were not paid premiums for Sunday work or overtime and many others did not have rest breaks. These issues affect large swathes of the workforce. Forfás estimates that between 170,000 and 300,000 people are covered by JLC agreements, while the Irish Congress of Trade Unions puts the figure at 550,000.

It should be noted that it was not the Government but Sinn Féin which was first to react to the case taken by the Quick Service Food Alliance that resulted in the current system being struck down as being in part unconstitutional. The Industrial Relations (Amendment) (No. 2) Bill, which was introduced by my party many months ago, remains stalled on Committee Stage. The lack of urgency shown by the Government when we discussed the Bill was disappointing. Since then, Sinn Féin has worked with the trade unions to ensure watertight legislation is introduced on this issue. While the Bill before us has many positive attributes, we will not support the negation of the Sunday premium because it will reduce the wages of the working poor.

I have some concerns that an agenda other than the protection of workers is at work in this Bill. Even before the court case on the JLC system was heard, the Minister indicated that he was seeking reform of this area and spoke in stark terms. His initial proposals included the abolition of half the JLCs, a review of the remaining committees, the drafting of criteria for JLCs, the submission of new EROs for all areas covered by the remaining JLCs, the introduction of provisions enabling amendment of REAs without the consent of both parties, and easier cancellation of REAs. Thankfully, he stepped back from the position he adopted initially, on which I commend him and all those involved in persuading him to change his mind.

Significant problems remain with the Bill. When it was first published the Minister stated: "I have been determined to strike a balance between protecting vulnerable workers and providing reforms that will make the systems more competitive and more flexible so as to allow the creation of jobs in these sectors." I highlight a false dichotomy in the Minister's words. Workers' rights and job creation are not in conflict. The Government's own review, the Duffy-Walsh report, found no evidence of a connection between employment levels and the protections and pay rates afforded by JLCs. I ask Senators to bear in mind this important point during the debate.

While I do not deny some of the positive aspects of the Bill, it is also something of a Trojan horse to the extent that it seeks to remove Sunday premiums from the lowest-paid workers. Sinn Féin will not support this provision and will table amendments to it on Committee Stage.

I speak as someone who has been an employer for 33 years, a shop steward for ten years and a permanent employee throughout my working life, as I have worked alongside most of the lads I have employed. I am pleased to support this common-sense Bill. Times have changed since I started as a trainee chef in 1974, when I was fortunate to enjoy the protection of a JLC agreement. At that time, we did not have a minimum wage, whereas nowadays the minimum wage provides a baseline from which to operate. This is the key to many of the issues arising in this regard.

I have listened to some of the points made about employees. There is also an employer dimension to this debate. To ensure the domestic economy survives and grows again we must correct some of the anomalies in the system. I do not disagree with any of the points Senator Barrett made on the industrial relations sector. A fine club is being developed in that area and it may need to be addressed.

Many Irish businesses operate across international borders 24 hours per day, 365 days of the year. The tourism and hospitality sector operate to similar times. We must enable companies to grow. A well known Wexford hotelier who is the patron of a hotel in Shannon to which my company supplies catering services has stated his hotel pays glass collectors €18 per hour on Sundays. We must call this issue as it is because we are employing young lads to do a bit of handy part-time work and nothing more.

I congratulate the Minister and Minister of State. The nationally agreed social partnership protocols provide a means of resolving any difficulties that may arise. Differences between the coalition partners are continually raised. When I go home on Friday or Saturday night, I am often told Fine Gael and the Labour Party are not getting on. I have been a Senator for 16 months and it appears to me that we are getting on well. While we have differences, these will be sorted out responsibly. It is fine if this is done in public but we will get on with our job and do a heck of a lot better than those who were in office for ten or 12 years before us.

Kilkenny would have needed much more extra time than I am getting in this debate to turn things around last Sunday.

Tipperary are worried they may meet us in the semi-final.

In any case, the ball has been thrown in.

I welcome the Minister of State and commend him on taking this complex legislation through the Dáil. The Bill is needed to address the issues presented to the Oireachtas by the recent court case. Notwithstanding the contribution of our Sinn Féin colleague, the Government increased the minimum wage to €8.65, whereas it is €6.91 in the North. Perhaps Sinn Féin could put some time and effort into matching the Northern Ireland rate with the rate here.

As the Senator is well aware, we do not set the minimum wage.

REAs and JLCs are very important and have ensured industrial peace for many years. Senator Barrett, who has a right-wing agenda, stated social partnership had not worked. I remind him that everybody, not only workers, got fat during the Celtic tiger. From 1913 onwards, when Mr. Murphy locked out his workers because they went on strike for a proper rate of pay, workers have always been viewed as being wrong by one side of society. I presume this view will prevail long after we have gone.

The legislation before us protects workers and those who are required to work on Saturday and Sunday. Senator Barrett argued that every day is the same. I do not see solicitors, accountants or major banks opening their practices or doors on Sundays. The lowest-paid workers are employed in the retail and service industries where they are required to work on Sundays as part of their employment contracts. They should be adequately recompensed for this work. I thank the Acting Chairman and wish Kilkenny the best for the rest of the year.

I remind Senator Landy that Tipperary has not yet won the Munster final.

As a Corkman, I am looking forward to the game against Wexford. No one should pre-empt the outcome of that match.

While I accept the points Senators have made, the bottom line is that the Bills introduced by Sinn Féin and the Fianna Fáil Party were not sufficiently comprehensive to address the issues being addressed in this legislation. They were too weak to provide the robust and comprehensive response required by the High Court ruling. Provisions are needed that will withstand a future challenge. That addresses two of the points.

I do not believe we should forget the fact that Sinn Féin voted against the reversal of the reduction in the minimum wage when we sought to restore it to €8.65 from €7.65. While I say this respectfully, I do not think any of us, particularly a Labour Party Minister, will take lectures in regard to the rights of low-paid workers. I know there was no lecture, but we should give the lie to the impression there is only one party in this House that has concern — a new-found, affected concern — for the rights of low-paid workers. Sinn Féin is being a little disingenuous in that regard.

With regard to Senator Barrett's point, if we roll back the machinery that has existed for a considerable period, I contend we are then in danger of effecting a regressive regimevis-à-vis the relationship between worker and employee. I believe the State has a role to play in industrial relations. I take the point that one can have a minimum wage and leave it at that, and the market can determine anything thereafter. What we have in this country, which Senator Landy has espoused, is a system in which there is a balance between the two sides. For certain types of work, there is a market and one can command a certain price but, also, the State has a machinery through the Labour Relations Commission to allow for robust protection of workers where they feel they have been maligned in any way. That is the system that exists, arguably, Europe-wide. We should be looking towards countries such as Germany in terms of the models that exist.

There is a wider philosophical debate in the point made by Senator Barrett. There was a specific question in regard to the workplace relations Bill, and I can ask the Minister, Deputy Bruton, to speak on that point when he comes to the House on Report Stage. What we are trying to do here is to respond responsibly to the result of the High Court. We want to ensure we do not throw the baby out with the bath water, so that we still have a system that ensures the rights of low-paid workers, in which there is redress and recourse for workers where there is a slight or perceived slight. We also want to ensure there is sufficient flexibility in the system and a statutory code in place to ensure both sides can at least come to the table to hammer out some sort of agreement, and do so through a process of consensus. There is nothing wrong with this. I believe it is a sensible solution, which is what we are trying to achieve in the Bill.

Question put and declared carried.
Committee Stage ordered for Thursday, 12 July 2012.
Sitting suspended at 5.35 p.m. and resumed at 5.50 p.m.